March 2013: Labor says Australia’s renewable energy target will stay

The Federal Labor Govt has made the decision to keep Australia’s renewable energy target. The target states a minimum 20% energy usage, or 41,000 gWh, will be generated by renewables by 2020.

See Combet interview below:

THE HON GREG COMBET AM MPMinister for Climate Change and Energy EfficiencyMinister for Industry and InnovationTRANSCRIPTGC ###/13 21 March 2013TRANSCRIPT OF DOORSTOP MEDIA CONFERENCE, CANBERRASUBJECT: Renewable Energy Target, Labor leadership, media reforms.E & O E – PROOF ONLYCOMBET: This morning I am releasing the Government's response to the review of theRenewable Energy Target that was carried out by the Climate Change Authority. So it isavailable from this morning.You will recall that the Climate Change Authority, which is chaired by Mr Bernie Fraser, formerTreasury Secretary and Reserve Bank Governor, was set up as part of the clean energypackage. And one of its first tasks was to review the Renewable Energy Target. It conductedan extensive and very professional review including detailed modelling, a lot of consultationwith stakeholders across the renewable energy and other industries and particularly players inthe energy sector very broadly. It did a lot of detailed work and reported the Government inDecember last year.There were 34 recommendations made to the Government by the Climate Change Authority.In the response that we have released today you will see that we have agreed with and willimplement 28 of those 34 recommendations. We have also agreed with three of therecommendations in principle, and further stakeholder consultation will take place in relationto them to investigate their workability. And we have rejected three of the recommendations.The principal theme that runs through the Climate Change Authority's review of theRenewable Energy Target is the importance of investment certainty. This is a Government thatof course established the Renewable Energy Target, legislated for it, and has been verycommitted to it. It is a part of the Government's policy matrix in the clean energy area, intackling climate change, and it works very closely with the carbon price legislation. But thisGovernment is committed to the Renewable Energy Target and we understand theimportance of investment certainty that’s been a theme of the review carried out by theClimate Change Authority.For that reason in relation to the principal recommendation made by the Authority, and thatis the retention of the fixed 41,000 gigawatt hour (GWh) target, the Government has agreedwith it. The detailed modelling that the Climate Change Authority carried out showed thatwere that target to be reduced, consistent with a level of 20 per cent of renewable energy oncurrent demand forecasts being delivered by the year 2020, that there would be a negligiblebenefit for households in reducing the target and also an additional 119 million tonnes ofgreenhouse gas emissions. So for purposes of investment certainty and on the basis of thefindings of the detailed work of the Climate Change Authority, the Government will not bealtering the fixed 41,000 GWh target.I indicated earlier of course that it is a very important part of the overall climate changepolicies that the Government has put in place. The Renewable Energy Target will work closelywith the carbon price in driving a lot of investment in renewable energy and we want toassure investors in renewable energy that the Government is very supportive of theinvestments that they are making and that they propose to make. All of our policies havedelivered a significant amount of investment in renewable energy in recent years including inthe small-scale area. We have now seen nearly a million installations of solar panels ondomestic rooftops in the time that the Government has been in power. In the period of theHoward Government prior to that I think there were only five or 6000 installations.So this is a Government very committed to renewable energy. We are going to remaincommitted to it and it is in stark contrast to the Opposition whose position is a bit all over theplace but I think we can only conclude one thing – they don't support the current structureand they would create tremendous uncertainty for investors in renewable energy. Mr Huntthe shadow minister has been talking about having another review within six months if theywin the next election. That will create tremendous uncertainty. Mr Abbott has indicated hedoesn't look like renewable energy very much, Senator Boswell says it should be got rid of, thestar candidate in the seat of Hume that the Liberals have of course says that you've got to getrid of it as well.I don't think that players in the renewable energy sector can have much confidence in whatthe Coalition is putting forward. They can certainly have a lot of confidence in what theGovernment has put in place and that we stand by in relation to this sector and I'm happy totake any questions you have got.JOURNALIST: What are the recommendations you have rejected?COMBET: There’s a couple of minor ones. One in relation to how the clearing house operates,there's a couple in relation to that, and another one concerning a wood waste regulation thatwas made as part of the MPCCC package.JOURNALIST: Can you explain that more because I thought the CCA didn't make a decisionabout how to handle bio, wood waste, that they had flicked it back to the Government?COMBET: It did make a recommendation about it but we don't agree with it. That issue wassettled and we will stick with where it was settled.JOURNALIST: So there is going to be no change there?COMBET: No change on that front.JOURNALIST: The target at the moment as I understand will actually overshoot. So can youjustify that given the investment climate?COMBET: Yes. I mentioned before you arrived that of course some of the stakeholders havesaid there should be a reduction in the fixed gigawatt hour target on the grounds that it islikely to overshoot a 20 per cent equivalent by the year 2020. We have accepted the ClimateChange Authority’s recommendation to retain the fixed gigawatt hour target, even if thatdoes overshoot 20 per cent. This will guarantee at least 20 per cent of our electricity supplycomes from renewable energy by the year 2020. But the detailed modelling the Authoritycarried out showed that even if you were to reduce the fixed gigawatt hour target therewould be negligible benefit for households and consumers from a cost point of view and it willalso lead to another 119 million tonnes of greenhouse gas emissions. There is not much meritto playing with it at all. But I think the key consideration in relation to that, being the principalissue in this report, is the issue of investment certainty. If you are an investor or a lender toinvestors in the renewable energy sector you want some certainty about these policy settingsand that is what the Government is giving the sector.JOURNALIST: Isn’t it a problem though that it is not the lowest cost abatement, the RET,Treasury has calculated it is around $40 per tonne of carbon and households are paying forthat high cost abatement through their energy bills.COMBET: Well we don't apologise for having a Renewable Energy Target, I make thatabsolutely clear. We are very committed to it and the response to this report makes that clearonce again. But we have legislated of course in the form of the carbon price the lowest costmethod of abating of greenhouse gas emissions in our economy. It is already driving change, ithas already contributed to an 8.6 per cent fall in emissions in the first six months of the periodof the operation of the carbon price. And the two policy measures work very closely together.We have a very emissions-intensive economy. We have got a major task ahead of us to reduceits emissions intensity and these two policy levers I think work well together at reasonablecost to the economy to try and drive the change that we need, to cut emissions and toimprove the emissions intensity of key industries, in particular the electricity generatingsector.JOURNALIST: How do you respond to Grant King who said this week that it wasn't the carbonprice that is driving abatement it was in fact the closure of aluminium smelters andmanufacturers due to the high cost of doing business in Australia which is contributed to bythe RET?COMBET: Well that is not supported by the evidence available. I think Mr King wouldacknowledge he might have got a couple of things wrong in the presentation that he made,but I note his comments. I would also say that you have got to remember that companiesargue their book. It wasn't that long ago that Mr King was putting propositions to Governmentthat involved an increase in the Renewable Energy Target because he saw good opportunitiesfor investment in that area. They are now major investors in the liquefied natural gas projectsgoing on up in Gladstone and he has a different view of on behalf of his company. That isentirely legitimate, I make no criticism, but you have always got to bear in mind thatcompanies are arguing their commercial interest. What the Government does is act in thenational interest and we are very firmly committed to the Renewable Energy Target where itis. We have accepted the key recommendations of the Authority for the purpose ofinvestment certainty and the other reasons that I outlined and we have legislated a carbonprice. We need to come back to the basic issues here. This Government respects the climatescience, we need to reduce greenhouse gas emissions, we have got to play our partinternationally. The Renewable Energy Target, the carbon price and other measures like theClean Energy Finance Corporation are absolutely key to achieving the goals we have set.JOURNALIST: I've been reading this week a submission from China that talks about studyinglinking ETS's, which they are talking about setting up national ones by about 2016, would youlike to comment because I think it is the first time I have read or understood that China reallyis looking at a global, joining a global ETS.COMBET: Well I've been talking about it for some period of time so I appreciate your doingsome reading. I am sure you do. Next week my counterpart from China will be in Australia andwe will have our annual dialogue. As a consequence of that dialogue in recent years we havehad a lot of exchanges of officials between Australia and China, going between both countrieswith an important focus on the design of market mechanisms to reduce greenhouse gasemissions and specifically the design of emissions trading schemes. I believe that that workhas helped contribute to the document that the Chinese released last week. It is a 300 pagedocument about the emissions trading schemes they are proposing to implement. They areserious about it. And next week we will discuss it much further. That has been done with aclear commitment between the two countries that what we are working towards is to link ourcarbon markets ultimately. We will have a similar dialogue with the Korean Government thatis implementing an ETS in 2015. I was in fact speaking with my counterpart in the UnitedStates this morning on the telephone and of course a scheme has been established inCalifornia and we have a dialogue with officials there. The argument put by Tony Abbott thatsomehow or other no one else is doing anything is complete garbage like pretty mucheverything else that he says. There is a lot going on internationally in this area. We are ofcourse linking with the European Union emissions trading scheme. This is the way thatinternationally countries will work together to reduce greenhouse gas emissions.JOURNALIST: The Authority also in its report modelled that electricity prices to householdswould only be increased between one and 4 per cent, I believe was their estimates. Do youfeel that the Government is doing the best job it can to explain to the Australian people howthese prices are relatively modest and there are quite a lot of myths around the debate aboutcarbon pricing?COMBET: Well we certainly do our best and I do my best to articulate the issues here. Themeasures we have put in place, we have done so very carefully and after very detailed workand with an eye to ensuring that it is at a minimum cost to the economy. It's a question reallyyou should put to Mr Abbott because the alternative policy proposition from the Opposition iscompletely ridiculous and it is a high economic cost way to reduce greenhouse gas emissionseven if they were to implement it. The responsibility of Government is to try and minimise thecost of adjustment to the economy. That is exactly what we have done. We have released alot of detailed modelling to that effect and you will recall of course that to assist consumersand households around the country we are using around 60 per cent of the carbon pricerevenue to cut taxes for low and middle income households, to increase the pension, toincrease other social security payments to assist people in making this adjustment. Millions ofpeople are in fact better.JOURNALIST: Mr Combet on other issues have you been canvassed by anyone, any supportersof Kevin Rudd about which way your allegiances lie?COMBET: Well I don't discuss those matters in the broader community, those sorts ofdiscussions going on internally. There are plenty of other commentators around. They can fillthat space.JOURNALIST: On the media law reform do you think proper process was observed with theway those Bills are going through (inaudible)COMBET: Yes I know that there has been a lot of debate about that but a lot of work has goneinto the media reforms that have been put before the Parliament. There has beenengagement with other parties in the Parliament about it. Two parts of it have come throughwhich will increase local content in our media services. I think that is a good thing and as Iunderstand it talks are continuing.JOURNALIST: The leadership issue is the elephant in the room at the moment ...COMBET: Seems to be running around a bit more broadly ...JOURNALIST: Should Rudd backers canvassing the media, should they pull their heads in?COMBET: I have made comments about all of that in the past and I can make the samepredictable comments now. However I think there is enough people running around talkingabout it at the moment. I genuinely don't think there is much to be gained by me adding to it.JOURNALIST: What do you think the public perception is of this disunity?COMBET: Well it's not good of course.JOURNALIST: If this disunity continues can you win the next election?COMBET: I can't speculate about that, it is obviously a difficult issue for us to manage at themoment but there is nothing to be gained by me adding to it.JOURNALIST: Some of your colleagues are saying that people like Joel Fitzgibbon are beingdisloyal for the comments that he made yesterday suggesting that colleagues had beencanvassing general support for a leadership change but weren’t counting numbers. Do youthink that Joel Fitzgibbon has been disloyal and if so do you think that he should resign fromthe position as chief whip.COMBET: I try and abide by a particular approach to these things and that is that I do notbackground and I don't leak to journalists and I don't criticise my colleagues and go arounddoing that in press conferences. I don't intend changing that now.JOURNALIST: Can I ask you are you disappointed that the new Victorian Premier didn'tconsider lifting the barrier to wind generation that they put in place?COMBET: Will the Victorian Government by its actions since it was elected, under Ted Baillieuoriginally, has inhibited investment in wind generation in south-west Victoria in particular.And investors looking to invest in wind generation will look elsewhere to make theirinvestments. That’s costing Victoria investment and it is costing jobs. They need to really thinkcarefully about it because it is a large area for significant investment in the years to come, weare expecting something in the order of $19 billion of investment in renewable energy and alot of that will be in wind. Why wouldn't you want a piece of that?ENDS